China slams ‘Made in Europe’ push, mulls retaliation

Beijing released a statement on Monday attacking the EU’s strategy to supercharge local industry, arguing that the European preference creates investment barriers and discrimination – and that countermeasures could follow.

China's Ministry of Commerce has criticized the EU's Industrial Acceleration Act, which was launched in March by the European Commission, for imposing restrictive requirements on foreign investment. The act aims to increase local production and reduce dependence on foreign suppliers. According to the ministry, these requirements create investment barriers and discrimination against non-EU companies. The European Commission has set a goal to increase the EU's industrial production to 20% of GDP by 2030.

The potential trade war between China and the EU could lead to higher prices for European consumers, particularly for electronics and machinery imported from China. For instance, the price of a smartphone could increase by 10-15% due to tariffs and trade restrictions. This would affect not only individual consumers but also businesses that rely on these products. The increased costs could be passed on to consumers, reducing demand and impacting the overall economy.

The EU's Industrial Acceleration Act is part of a broader trend of protectionism and industrial policy in major economies. The act is similar to the US's Buy American Act, which prioritizes domestic production and procurement. Insiders know that this trend is driven by concerns over supply chain security, intellectual property protection, and economic competitiveness. The EU's act is also a response to China's Belt and Road Initiative, which has increased Chinese investment and influence in European infrastructure and industry.

The European Commission is expected to release a report on the implementation of the Industrial Acceleration Act by the end of June. The report will provide details on the act's impact on foreign investment and trade. Meanwhile, China's Ministry of Commerce has announced that it will conduct a review of EU trade practices, which could lead to retaliatory measures. Interestingly, some Chinese companies, such as Huawei, have already begun to shift their production to other regions, including Southeast Asia, in anticipation of potential trade restrictions.